If one is curious in knowing how Bernard Madoff was able to pull off the biggest Ponzi scheme it is a good idea to read the book The Story of Bernard L. Madoff, The Man Who Swindled the World, written by Deborah and Gerald Strober. The Strobers have conducted a detailed study into the matter by interviewing several people who had dealt with Bernard Madoff. They have also gathered important information about the several transactions done by Madoff in swindling his clients.
In fact, the authors have made attempts in piecing together a fraudulent act that has been referred to being a fraud that surpassed all proportions. A bird’s eye view has been given in the book about the kind of tricks that Madoff used, although there are several questions that still remain unanswered.
People still wonder as to how Mardoff could have managed to pull off such a big fraud that extended for a long period. The questions that arise about him after getting to know his ways are many; whether he was a sociopath, mentally disturbed, or whether he was entirely rational though completely amoral. The book is divided into four parts along with nine appendices that are very appealing and significant. The first part of the book relates to the confessions and subsequent arrest, details about the victims and the loss of Jewish wealth, and about the fact that the Jews were not the only community that was made victims.
The second part narrates about Madoff and his family and gives a detailed account of Bernard in terms of where he grew up, his school, and other related information. Part three provides information about the way the shocks were absorbed and how the consequences were dealt with. It is in this part that the reader gets to know the story of the victims in regard to the antisemitic vox populi. Part four delves into the future course of action after the revelation of all facts and the kind of punishment that should have been given to the culprit.
Born in New York in 1938, Bernard Madoff was brought up in Queens. His shrewdness in money matters did not surface while he was in high school. It was in 1960 that he invested $5000 and formed his company, Bernard L. Madoff Investment Securities, LLC, (BMIS). He started making his fortune very discreetly and dared to do things which other brokers would never have thought of doing, for which he began to be called a financial wizard and a pioneer in his field.
Bernard Madoff was a well-known and respected financier, former chairman of Nasdaq, and member of elite clubs. After having established his firm that dealt with financial securities, he performed extraordinarily well and made billions of dollars in assets. Very few financial experts knew him before the 1980s and fewer were aware of when he initiated the Ponzi schemes. When the scandal became public, Madoff was arrested and everybody was shocked to find that the person on whom they had placed their trust with their money, was actually a thief. A number of people lost millions of dollars while others were cheated of their entire wealth on account of handing over their retirement funds to him. There was doubt whether Madoff had actually invested the money at all.
People were perplexed as to how investment advisors could confirm that they had carried out the due diligence about Madoff’s activities. One investment advisor had gone to the extent of declaring that an investigation agency had been hired to make a thorough background check about Madoff and his fund managers. It also came to light that investment advisors had handed over the money of investors without their consent to Madoff and without revealing that he was giving them a commission of 1.5% on such investments. Investigations are done by the SEC also did not unearth any kind of fraud on the part of Mardoff.
Questions were subsequently raised about the authenticity of such investigations and about the competency of the investigators. The authors have raised the question about how much the SEC actually knew about Mardoff. Above all the SEC had ignored the warnings of Harry Markopolos, an eminent financial figure, who consistently warned the agency about the malpractices being adopted by Mardoff.
It is surprising how Madoff was able to carry out his nefarious activities from Palm Beach, Hamptons and Manhattan by clandestinely watching over rich neighbours, joining their elite clubs and by establishing his trust in them. It was not long before he exerted a magnetic pull on such people who literally begged him to invest on their behalf. One person interviewed by the authors hit the target when he described Madoff as an extremely shrewd person who understood human psychology, especially in regard to the human greed for making fast money. When people asked him for his secret about his investments he simply said that it was a proprietary strategy.
Bernard Mardoff was found guilty on 12th March, 2009 and was sent to jail. Although he apologized for his misdeeds it is doubtful whether people will get to know the actual story behind such a massive Ponzi scheme, the likes of which have never been witnessed in history. Having read the book one is bound to consider that he could not have done all this alone. The big question arises as to who all were involved with him in such a hideous crime.
The Strobers have done a commendable job under the prevailing circumstances. There does appear to be an element of haste in their work and some repetitions have been observed in the book. There are a number of quotations which have been appropriately and meaningfully placed in focussing on the actual events. I believe this is the right approach in making the required narrations which have been made with lot of clarity and authenticity.
The sequence of events as narrated by the authors is very exciting in exposing Madoff’s criminal intent. It is highly praiseworthy that the authors have handled the issue of Madoff’s Jewish origin very delicately in exposing that he had swindled a number of Jewish charitable organizations and associations. The authors have used an exemplary tone in notifying that it was organizations from his community that suffered the maximum.
Works Cited
Strober Gerald, Strober Deborah, Catastrophe: The Story of Bernard L. Madoff, the Man Who Swindled the World, 2009, Phoenix Books.